BC Food and Beverage Processors Survey

BC Food and Beverage Processors Survey Survey Results May 2003 Prepared by Marsha Schroeder, Ph.D. Klaus Schroeder, Ph.D. Schroeder Research Inc. 1105 867 Hamilton Street Vancouver, BC V6B 6B7 604-662-3402 FAX 604-662-3406

Table of Contents Executive Summary... iii Overview... 1 Methodology and Description of the Sample... 1 Survey Results... 4 SECTION ONE Importance of Issues... 4 SECTION TWO Industry Associations... 6 SECTION THREE Specific Services... 7 Subgroup Differences... 10 Breakdown of Results by Industry Sector... 10 Breakdown of Results by Revenue... 12 Breakdown by Number of Employees... 14 Breakdown by Geographic Location... 16 Appendix A Sample Survey... 18 Appendix B List of Participating Companies... 25 BC Food and Beverage Processors Survey ii

Executive Summary Overview Schroeder Research Inc., in collaboration with representatives from Nova Quality Training and Consulting and Dan Wong and Associates, developed the BC Food and Beverage Processors Survey. The survey was designed to obtain information from individuals who work in British Columbia s food and beverage processing industry about their views on a proposed umbrella organization that could help them meet competitive challenges the industry faces and address areas where industry joint action would be beneficial. Description of the Sample 618 potential survey respondents were identified using lists provided by the Department of Agriculture and Agri-Food Canada, and the Investment Agriculture Foundation of BC. Nova representatives attempted to contact all of these individuals, and succeeded in reaching 414 business owners or senior executives. 136 surveys were completed, 84 in telephone interviews, and 52 in electronic (facsimile or email) form. Importance of Issues Respondents rated the importance of six issues identified by leaders in the food and beverage industry. Respondents used a scale that ranged from 1 = Not At All Important to 10 = Very Important. The issue of Responsive and Equal Regulations was rated as most important and Research and Education was rated as least important. Issue n Mean Responsive and Equal Regulations 132 7.34 Labour Costs 133 7.06 Access to Capital 135 6.56 Support Infrastructure and Market Information 135 6.13 Coordination and Strategic Focus 132 6.13 Research and Education 135 5.87 Respondents were asked whether there were other issues that should be priorities for the food and beverage industry; 32 of the 136 respondents mentioned market access. Respondents were asked to indicate the issues they thought would have the greatest impact on their business in the next three to five years. Competitive cost structure and equity with other jurisdictions, information about and application of trade rules, and competition (new competitors and global competitors) were most frequently mentioned. BC Food and Beverage Processors Survey iii

Industry Associations Fifty-eight percent of respondents reported that they belonged to one or more food and beverage associations or sector processing groups. The main reasons they provided for having a membership were access to information, lobbying, or because membership was mandatory. The most frequently mentioned service that a new organization could provide that they were not currently receiving was lobbying the provincial government. The reader should note that only nine people mentioned this service in response to the unaided question. Respondents indicated that they were receiving good value for the cost of their industry group memberships. Almost one-half provided a rating of 8 or higher on the 10-point scale used to assess membership value. Specific Services Respondents were asked to indicate how interested they were in each of 15 specific services that a BC food and beverage association might provide. Over 40% of respondents indicated that they were Very Interested in the following services. Information about government programs, and how to access grants and funds (53% Very Interested). Lobbying the provincial government about issues of importance to the food and beverage industry (50%). Education seminars on topics such as changes in legislation or industry regulations, workplace health and safety, labeling, and shipping to the US (45%). A website that would provide information about issues of relevance to the food and beverage industry (43%). Lobbying the federal government about issues of importance to the food and beverage industry (43%). Lobbying local governments about issues of importance to the food and beverage industry (41%). Respondents expressed least interest in help with staff recruitment, development, or training (21%) and information about or help with importing products (17%). Respondents were asked what kind of association model they preferred. 44% preferred an organization of individual processors. 27% preferred a confederation of existing sector organizations. 21% did not express a preference. Respondents were asked to indicate what specific role an umbrella organization should play and what services it should offer. Advocacy and lobbying, and providing general information and education were the two most frequently mentioned topics. This unaided question was answered by 76 of the 136 respondents. BC Food and Beverage Processors Survey iv

Interest in Joining an Industry Association Respondents were asked to rate how interested they would be in joining a BC-based food and beverage industry association using a scale where 1 was Not At All Interested and 10 was Very Interested. The mean rating was 6.20; 46 of the 129 respondents (36%) provided a rating of 8 or higher. Over 60% of respondents indicated that the annual fee should not exceed $250. Just over one-third of respondents expressed interest in being involved in an industry association as a board or committee member, 40% were not interested, and 27% did not know. BC Food and Beverage Processors Survey v

Overview Schroeder Research Inc., in collaboration with representatives from Nova Quality Training and Consulting and Dan Wong and Associates, developed the BC Food and Beverage Processors Survey. The survey was designed to obtain information from individuals who work in British Columbia s food and beverage processing industry about their views on a proposed umbrella organization that could help them meet the competitive challenges the industry faces and address areas where industry joint action would be beneficial. A sample survey is provided in Appendix A. Methodology and Description of the Sample Potential survey respondents were identified by obtaining lists from the Department of Agriculture and Agri-Food Canada, and from the Investment Agriculture Foundation of BC. Nova consolidated the two lists, removing duplicate businesses and businesses not directly involved in food processing. This resulted in a list of 618 food and beverage processors. Nova representatives attempted to contact all of these individuals, and succeeded in reaching 414 business owners or senior executives. Of these, 84 completed the survey in a telephone interview, and 52 requested and returned an electronic (facsimile or email) version of the survey. The list of participating companies is contained in Appendix B; six surveys were returned without identifying information. Assuming that the 618 food and beverage processors define the population of interest, the completion rate for the survey is 22%. We cannot know how representative the 136 respondents are of the population of all processors. Only 22 individuals verbally declined to participate. We do not know why other potential participants failed to complete the survey. Survey respondents were classified according to their industry sector (primary food processor, packaged food processor, producer of alcoholic beverages, producer of non-alcoholic beverages), business location (Lower Mainland, Vancouver Island, Interior, Northern BC), business gross revenue, and number of full-time equivalent employees. The following graphs show the breakdown of the sample on these variables. We created five categories for number of employees to simplify presentation. The total number of responses in the graphs is less than 136 because some respondents did not provide the information. BC Food and Beverage Processors Survey 1

Industry Sector 60 50 40 51 44 30 25 20 10 0 Primary Processor Secondary Processor Alcoholic Beverages Figures are the number of respondents. 11 Non-Alcoholic Beverages Location 100 80 80 60 40 34 20 20 0 Lower Mainland Vancouver Island Interior Figures are the number of respondents. BC Food and Beverage Processors Survey 2

Gross Annual Revenue 50 44 40 34 30 23 20 10 6 9 12 0 < $250K $250K to $1M $1M to $10M $10M to $20M $20M to $50M Figures are the number of respondents. > $50M Number of Employees 40 30 20 21 25 30 24 28 10 0 1 or 2 3 to 5 6 to 20 21 to 50 Over 50 Figures are the number of respondents. BC Food and Beverage Processors Survey 3

Survey Results In this section of the report we provide information about the number and percentage of individuals who answered the survey questions. Because of rounding some percentages do not sum exactly to 100%. Multiple responses were allowed to some questions. The percentages for these questions exceed 100% because we have provided the percentage of respondents who gave a particular response. SECTION ONE Importance of Issues The first section of the survey asked respondents to indicate how important six issues were for their company. These issues were identified in meetings and forums held by leaders in the food and beverage industry. Respondents were asked to provide a rating on a 10-point scale where 1 was Not At All Important and 10 was Very Important. The following table shows the number of respondents who provided a rating (n), the mean rating, and the percentage of respondents who provided each rating. Two issues received mean importance ratings greater than 7 on the 10- point scale: Responsive and Equal Regulations (7.34) and Labour Costs (7.06). Research and Education was rated as the least important issue. Issue Percentage of respondents who provided ratings of n Mean 1 2 3 4 5 6 7 8 9 10 Research and Education 135 5.87 12 2 10 10 9 8 13 19 10 8 Support Infrastructure and Market Information 135 6.13 7 7 5 8 10 11 12 21 9 10 Access to Capital 135 6.56 7 3 12 6 10 6 2 19 18 17 Responsive and Equal Regulations 132 7.34 5 2 4 1 14 8 12 17 14 26 Coordination and Strategic Focus 132 6.13 5 2 10 9 14 10 14 20 8 8 Labour Costs 133 7.06 6 3 3 5 12 11 6 17 14 24 For each of the six issues, respondents who provided a rating of 7 or higher were asked if there were particular activities, functions, or topics of interest to them. Responses to these questions, and to all other open-ended survey questions, are provided in a separate document. Respondents were asked, unaided, if there were other issues that they thought should be priorities for the food and beverage industry. Most responses were coded into categories. The Other responses are provided in a separate document. The 79 individuals who responded to this question identified 122 issues, many of which were specific to their industry sector. BC Food and Beverage Processors Survey 4

Other issues that should be priorities for the food and beverage industry Number of Respondents Percentage of Respondents Market access 32 41% Networking 13 16% Regulations 11 14% Advocacy 7 9% BC brand identification 7 9% Taxes 6 8% Affinity/discount programs 1 1% Other 45 57% Respondents also were asked, unaided, what issues they thought would have the greatest impact on their business in the next three to five years. Most responses were coded into categories. The Other responses are provided separately. The 123 people who answered this question identified 296 issues. Issues that respondents thought would have the greatest impact on their business in the next three to five years. Competitive cost structure/level playing field with other jurisdictions Number of Respondents Percentage of Respondents 38 31% Trade rules (information on/application of) 25 20% Competition (new competitors/global competitors) 21 17% Labeling (including foreign labeling requirements) 19 15% Food safety 18 15% Regulations 16 13% Supply of raw materials 14 11% Currency 12 10% Transportation/distribution 11 9% Health and safety 10 8% Environmental concerns 8 7% Supply chain consolidation/trade relations 8 7% US customs 7 6% Market access 7 6% Shifts in consumer demand 6 5% New technology 5 4% Industry diversification 5 4% US trade 5 4% Genetically modified foods 3 2% Increased fuel costs 2 2% Other 56 46% BC Food and Beverage Processors Survey 5

SECTION TWO Industry Associations Respondents were asked whether they were a member of any food and beverage associations or sector processing groups. Of the 133 individuals who answered this question, 77 (58%) reported that they belonged to one or more groups. Respondents who belonged to one or more groups were asked why they were members. The following table indicates that the main reasons for membership were to have access to information and to have a voice. Reasons for Industry Association Membership Number of Respondents Percentage of Respondents To obtain or have access to information 22 31% For lobbying or to have a voice 17 24% Because membership is mandatory or traditional 15 21% For networking 9 13% For marketing purposes 6 8% To enhance status or reputation of the business 2 3% Because of Affinity programs 1 1% 72 100% Respondents were asked whether there were any services they did not currently receive that a BC food and beverage association could provide. Nine people mentioned lobbying the provincial government, six mentioned networking, and four mentioned market access. The few Other responses that did not fall into the categories included in the survey are provided separately. Respondents were asked to rate the value of their association memberships considering what they pay on a scale where 1 was Poor Value and 10 was Excellent Value. Most respondents rated membership value favourably. The mean rating was 7.28; 36 of the 75 respondents (48%) provided a rating of 8 or higher. Only 10 respondents gave a rating lower than 6. These individuals were asked for the reason for their rating. Three mentioned a lack of benefits, two did not provide a reason, and a few respondents mentioned very specific reasons. These reasons are contained in a separate document. Value of association membership considering what you pay Percentage of respondents who provided ratings of n Mean 1 2 3 4 5 6 7 8 9 10 75 7.28 0 1 4 3 5 17 21 27 4 17 BC Food and Beverage Processors Survey 6

SECTION THREE Specific Services In this section of the survey, respondents were asked how interested they were in each of 15 specific services that a BC food and beverage association might provide. The services listed in the following table are sorted according to the percentage of respondents who indicated that they were Very Interested in the service. Service Information about government programs, and how to access grants and funds. Lobbying the provincial government about issues that are important to the food and beverage industry. Education seminars on topics such as changes in legislation or industry regulations, workplace health and safety, labeling, shipping to the US. A website that provides information about issues relevant to the food and beverage industry. Lobbying the federal government about issues that are important to the food and beverage industry. Lobbying local governments about issues that are important to the food and beverage industry. The provision of technical services such as HACCP (Hazard Analysis Critical Control Points) or ISO. Participation in generic food and beverage product promotions like Buy BC. Information about or help with product marketing and exporting, including joint venture exporting opportunities. Information about or help with product marketing, including shipping to and from areas in Canada outside of BC. Affinity programs that provide discounts for such things as VISA, telephone long distance service, or business insurance. Meetings and forums with food and beverage organizations that would provide you with networking opportunities with the trade. Meetings and forums with other individuals working in the food and beverage industry that would provide you with networking opportunities. Help with staff recruitment, development, or training. Information about or help with importing products. N Percentage of respondents who answered Not At All Somewhat Very Already have Interested Interested Interested this service 134 7 35 53 4 135 9 32 50 10 136 10 35 45 10 136 10 42 43 5 134 14 32 43 11 135 24 29 41 6 135 21 32 39 8 134 20 38 38 4 134 22 34 36 8 134 24 34 36 6 136 26 37 29 9 134 12 51 27 10 136 15 52 25 8 133 38 35 21 5 135 45 30 17 7 BC Food and Beverage Processors Survey 7

Respondents were asked to indicate which of two industry association models they thought would best meet their company s needs. The following table indicates that an organization of individual processors was preferred over a confederation of existing sector organizations. Number of Respondents Percentage of Respondents Preferred Association Model A confederation of existing sector organizations that would jointly fund an umbrella association that would address 36 27% common issues. An organization consisting of individual food and beverage processors who would pay a membership fee and fees 58 44% for additional services. A combination of the two models 2 2% Don t Know 28 21% Other 7 5% 131 100% Respondents were asked, unaided, to indicate what specific role an umbrella organization should play and what services it should offer. Most responses were coded into categories. The Other responses are provided separately. The 76 individuals who responded to this question identified 157 topics. Thirty-two respondents indicated that they did not know what role the organization should play and 28 did not answer the question. What specific role should an umbrella organization play and what services should it offer? Number of Respondents Percentage of Respondents Advocacy/Lobbying 34 44% General information/education 21 28% Networking 17 22% Formal education (seminars, training, certification, etc.) 15 20% Access to industry programs and funding 14 18% Coordination of food and beverage sector interests 11 14% Technical services/technical support 9 12% Media relations 2 3% Affinity programs 2 3% Other 32 42% BC Food and Beverage Processors Survey 8

Respondents were asked to rate how interested they would be in joining a BC-based food and beverage industry association on a scale where 1 is Not At All Interested and 10 is Very Interested. The mean rating was 6.20; 46 of the 129 respondents (36%) provided a rating of 8 or higher. The following table provides a breakdown of all responses. Interest in joining an industry association Percentage of respondents who pr ovided ratings of n Mean 1 2 3 4 5 6 7 8 9 10 129 6.20 7 4 8 5 12 10 18 16 11 9 Respondents were asked to indicate what they thought a realistic annual membership fee would be for a company like theirs. Over 60% of respondents indicated that the annual fee should not exceed $250. Seven respondents did not know what a realistic fee would be and two individuals did not provide an answer. What would be a realistic annual membership fee? Number of Respondents Percentage of Respondents Under $100 35 28% $100 to $250 48 38% $250 to $500 17 13% $500 to $1000 16 13% $1000 to $5000 11 9% Over $5000 0 0% 127 100% The final question of the survey asked respondents whether they would be interested in being involved in an industry association, for example, as a board member or committee member. Would you be interested in being involved in an industry association as a board or committee member? Number of Respondents Percentage of Respondents Yes 45 34% No 53 40% Don t Know 36 27% 134 100% BC Food and Beverage Processors Survey 9

Subgroup Differences In this section of the report we provide breakdowns by industry sector, revenue, number of employees, and geographic location. We examined mean ratings provided to the top six issues, the percentage of respondents who were very interested in the 15 specific services, and the percentage of respondents who belonged to industry associations. In addition, we looked at subgroup differences to determine how interested respondents were in joining a new food and beverage association. There were no significant differences in interest by subgroup in joining an association. Finally, we examined subgroup differences in the percentage of individuals who indicated that a realistic membership fee for a company like theirs was $250 or less compared to individuals who thought that a membership fee of over $250 was appropriate. Breakdown of Results by Industry Sector In this section of the report we present the results broken down by the four industry sectors. The reader should keep in mind that there are only 11 respondents in the non-alcoholic beverage sector. In addition, the majority of the respondents in the primary and secondary food processor sectors were from the Lower Mainland, while the majority of respondents in the alcoholic beverage sector were from the Interior. The first table contains the average importance rating provided to each of the six top issues. No statistically significant group differences were found. This means that differences among groups are no larger than would be expected by chance alone. Industry Sector Issue Primary Food Secondary Alcoholic Non-Alcoholic Processor Food Processor Beverages Beverages Research and Education 6.00 5.79 5.80 5.27 Support Infrastructure and Market Information 6.37 6.56 5.16 5.27 Access to Capital 6.98 6.21 6.16 6.64 Responsive and Equal Regulations 7.94 7.05 6.38 7.20 Coordination and Strategic Focus 6.33 6.02 5.48 6.40 Labour Costs 7.14 7.65 5.84 7.18 The table below shows the percentage of respondents in each sector that reported belonging to any food and beverage associations or sector processing groups. As can be seen, respondents in the alcoholic beverage sector were most likely to have memberships in these organizations. Primary Food Secondary Alcoholic Non-Alcoholic Processor Food Processor Beverages Beverages 59% 48% 80% 55% BC Food and Beverage Processors Survey 10

The following table contains the percentage of respondents who indicated that they were very interested in each of the 15 specific proposed services. Where the difference between the highest and lowest group is at least 20 percentage points we have shaded these scores. The results show that respondents in the alcoholic beverage sector often were least interested in receiving these services. Service a. Meetings and forums with food and beverage organizations that would provide you with networking opportunities with the trade. b. Meetings and forums with other individuals working in the food and beverage industry that would provide you with networking opportunities. c. Lobbying the federal government about issues that are important to the food and beverage industry. d. Lobbying the provincial government about issues that are important to the food and beverage industry. e. Lobbying local governments about issues that are important to the food and beverage industry. f. Affinity programs that provide discounts for such things as VISA, telephone long distance service, or business insurance. g. Education seminars on topics such as changes in legislation or industry regulations, workplace health and safety, labeling, shipping to the US. h. A website that provides information about issues relevant to the food and beverage industry. i. Help with staff recruitment, development, or training. j. Information about or help with product marketing, including shipping to and from areas in Canada outside of BC. k. Information about or help with product marketing and exporting, including joint venture exporting opportunities. l. Information about or help with importing products. m. Participation in generic food and beverage product promotions like Buy BC. n. The provision of technical services such as HACCP (Hazard Analysis Critical Control Points) or ISO. o. Information about government programs, and how to access grants and funds. Primary Processor Secondary Processor Alcoholic Beverages Non- Alcoholic Beverages 25 33 16 18 31 27 8 9 39 44 45 36 53 44 52 45 43 50 33 18 33 27 28 18 47 52 20 54 51 48 12 55 18 26 8 27 30 43 29 27 38 44 12 36 16 21 4 27 39 40 38 27 36 45 24 45 56 56 52 27 BC Food and Beverage Processors Survey 11

The following table shows the percentage of individuals who believed that a realistic membership fee was less than or more than $250. Although respondents in the non-alcoholic beverages sector thought that more than $250 was appropriate, this difference is not statistically significant because of the small number of respondents in this sector. Realistic Annual Fee Primary Food Processor Secondary Food Processor Alcoholic Beverages Non-Alcoholic Beverages Under $250 68 70 63 45 Over $250 32 30 37 55 Breakdown of Results by Revenue This section of the report contains a breakdown of results by gross annual revenue. For these analyses we combined the highest three categories to create the category Over $10 Million which contains 28 respondents. We did this because of the small number of respondents in the $10 Million to $20 Million, and $20 Million to $50 Million categories. The reader should keep in mind that 20 of the businesses in the Over $10 Million category are located in the Lower Mainland. The first table contains the average importance rating provided to each of the six top issues. We found no statistically significant group differences. Gross Revenue Issue <$250K $250K to $1M $1M to $10M >$10M Research and Education 5.91 5.35 6.50 5.85 Support Infrastructure and Market Information 6.29 6.26 6.27 5.78 Access to Capital 6.65 6.83 7.25 5.63 Responsive and Equal Regulations 7.38 6.70 7.41 7.73 Coordination and Strategic Focus 6.44 5.32 6.35 5.93 Labour Costs 6.36 6.57 7.19 7.67 The table below shows the percentage of respondents in each revenue category that reported belonging to one or more food and beverage associations. As can be seen, respondents with gross revenue above $1 million were more likely to have memberships in these organizations. <$250K $250K to $1M $1M to $10M >$10M 50% 38% 66% 69% BC Food and Beverage Processors Survey 12

This table contains the percentage of respondents who indicated that they were very interested in each of the 15 specific proposed services. Where the difference between the highest and lowest group is at least 20 percentage points we have shaded these scores. There are only three substantial differences by revenue group. Respondents with revenue of over $10 million were least interested in affinity programs, information about product marketing, and information about how to access government programs. Service a. Meetings and forums with food and beverage organizations that would provide you with networking opportunities with the trade. b. Meetings and forums with other individuals working in the food and beverage industry that would provide you with networking opportunities. c. Lobbying the federal government about issues that are important to the food and beverage industry. d. Lobbying the provincial government about issues that are important to the food and beverage industry. e. Lobbying local governments about issues that are important to the food and beverage industry. f. Affinity programs that provide discounts for such things as VISA, telephone long distance service, or business insurance. g. Education seminars on topics such as changes in legislation or industry regulations, workplace health and safety, labeling, shipping to the US. h. A website that provides information about issues relevant to the food and beverage industry. i. Help with staff recruitment, development, or training. j. Information about or help with product marketing, including shipping to and from areas in Canada outside of BC. k. Information about or help with product marketing and exporting, including joint venture exporting opportunities. l. Information about or help with importing products. m. Participation in generic food and beverage product promotions like Buy BC. n. The provision of technical services such as HACCP (Hazard Analysis Critical Control Points) or ISO. o. Information about government programs, and how to access grants and funds. <$250K $250K to $1M $1M to $10M >$10M 32 18 35 19 29 17 27 26 42 43 47 44 53 57 43 54 48 35 39 44 35 26 32 15 41 43 55 41 50 43 45 41 25 26 21 15 47 43 34 26 36 48 33 37 18 26 12 19 32 39 47 35 35 32 48 37 58 57 64 39 BC Food and Beverage Processors Survey 13

The following table shows the percentage of individuals who believed that a realistic membership fee was less than or more than $250. Revenue was highly related to what individuals believed was a realistic annual fee. In particular, of the 25 individuals from companies with revenue of over $10 million, 8 thought that between $500 and $1000 dollars was appropriate and 6 thought that between $1000 and $5000 was appropriate. Of the 42 people from companies with revenue between $1 million and $10 million, 9 indicated that between $500 and $5000 was an appropriate annual fee. Only one individual from a company with revenue less than $1 million thought that an annual fee of $1000 or more was appropriate. Realistic Annual Fee <$250K $250K to $1M $1M to $10M >$10M Under $250 88 91 57 24 Over $250 12 9 43 76 Breakdown by Number of Employees This section contains breakdowns by the number of employees grouped into the five categories described previously. The reader should keep in mind that the number of employees is substantially related to gross revenue. The first table contains the average importance rating provided to each of the six top issues. For Labour Costs, the rating provided by respondents with one or two employees was significantly lower than the average ratings provided by the other groups. We found no other statistically significant group differences. Number of Employees Issue 1 or 2 3 to 5 6 to 20 21 to 50 Over 50 Research and Education 5.33 5.40 6.03 6.17 5.96 Support Infrastructure and Market 6.10 5.88 6.17 6.21 6.18 Information Access to Capital 6.29 6.72 6.80 7.21 5.57 Responsive and Equal Regulations 7.00 6.92 7.70 7.00 7.70 Coordination and Strategic Focus 6.37 5.79 6.41 6.04 5.82 Labour Costs 5.00 6.83 7.55 7.08 7.75 The table below shows the percentage of respondents in each employee size category that reported belonging to any food and beverage associations. As can be seen, respondents with over 20 employees were somewhat more likely to have memberships in these organizations than were respondents with fewer employees. 1 or 2 3 to 5 6 to 20 21 to 50 Over 50 57% 38% 60% 67% 73% BC Food and Beverage Processors Survey 14

This table contains the percentage of respondents who indicated that they were very interested in each of the 15 specific proposed services. Where the difference between the highest and lowest group is at least 20 percentage points we have shaded these scores. Respondents with one or two employees were most interested in lobbying the provincial government and having access to a website containing industry information. These respondents were least interested in information about importing products and the provision of technical services. Respondents with over 50 employees were least interested in lobbying the federal or provincial government, affinity programs, and the website. Service 1 or 2 3 to 5 6 to 20 21 to 50 Over 50 a. Meetings and forums with food and beverage organizations that would provide you with networking opportunities with the trade. b. Meetings and forums with other individuals working in the food and beverage industry that would provide you with networking opportunities. c. Lobbying the federal government about issues that are important to the food and beverage industry. d. Lobbying the provincial government about issues that are important to the food and beverage industry. e. Lobbying local governments about issues that are important to the food and beverage industry. f. Affinity programs that provide discounts for such things as VISA, telephone long distance service, or business insurance. g. Education seminars on topics such as changes in legislation or industry regulations, workplace health and safety, labeling, shipping to the US. h. A website that provides information about issues relevant to the food and beverage industry. i. Help with staff recruitment, development, or training. j. Information about or help with product marketing, including shipping to and from areas in Canada outside of BC. k. Information about or help with product marketing and exporting, including joint venture exporting opportunities. l. Information about or help with importing products. m. Participation in generic food and beverage product promotions like Buy BC. 24 25 28 29 25 24 28 20 25 21 50 36 41 54 32 62 48 43 54 41 50 32 37 46 39 33 40 30 29 18 38 52 47 50 39 62 36 40 46 39 15 28 21 17 14 35 46 33 33 32 29 46 33 35 29 0 24 23 13 19 33 32 40 45 43 BC Food and Beverage Processors Survey 15

Service 1 or 2 3 to 5 6 to 20 21 to 50 Over 50 n. The provision of technical services such as HACCP (Hazard Analysis Critical Control Points) or ISO. 24 36 47 46 30 o. Information about government programs, and how to access grants and funds. 55 48 53 58 52 The following table shows the percentage of individuals who believed that a realistic membership fee was less than or more than $250. As was the case with revenue, number of employees was highly related to what individuals believed was a realistic annual fee. The larger the company the more likely individuals were to indicate that a fee over $250 was appropriate. Realistic Annual Fee 1 or 2 3 to 5 6 to 20 21 to 50 Over 50 Under $250 94 91 72 46 32 Over $250 6 9 28 54 68 Breakdown by Geographic Location This section contains breakdowns grouped by geographic location. The reader should keep in mind that this variable is substantially related to gross revenue, sector, and number of employees. The first table contains the average importance rating provided to each of the six top issues. None of the group comparisons attained statistical significance. Location Issue Lower Vancouver Mainland Island BC Interior Research and Education 5.95 5.35 6.21 Support Infrastructure and Market Information 6.22 6.00 6.26 Access to Capital 6.71 6.40 6.44 Responsive and Equal Regulations 7.68 6.45 7.41 Coordination and Strategic Focus 6.17 6.00 6.27 Labour Costs 7.51 6.45 6.71 The table below shows the percentage of respondents in each location that reported belonging to any food and beverage associations. As can be seen, respondents in the Lower Mainland were least likely to have memberships in these organizations. Lower Vancouver BC Interior Mainland Island 52% 65% 68% BC Food and Beverage Processors Survey 16

This table contains the percentage of respondents who indicated that they were very interested in each of the 15 specific proposed services. For the most part, respondents on Vancouver Island expressed greatest interest in these services. Service a. Meetings and forums with food and beverage organizations that would provide you with networking opportunities with the trade. b. Meetings and forums with other individuals working in the food and beverage industry that would provide you with networking opportunities. c. Lobbying the federal government about issues that are important to the food and beverage industry. d. Lobbying the provincial government about issues that are important to the food and beverage industry. e. Lobbying local governments about issues that are important to the food and beverage industry. f. Affinity programs that provide discounts for such things as VISA, telephone long distance service, or business insurance. g. Education seminars on topics such as changes in legislation or industry regulations, workplace health and safety, labeling, shipping to the US. h. A website that provides information about issues relevant to the food and beverage industry. i. Help with staff recruitment, development, or training. j. Information about or help with product marketing, including shipping to and from areas in Canada outside of BC. Lower Mainland Vancouver Island BC Interior 24 40 26 25 30 24 44 50 38 48 65 48 41 50 38 28 40 26 46 65 32 45 55 35 20 32 18 36 45 32 k. Information about or help with product marketing and exporting, including joint venture exporting 40 45 24 opportunities. l. Information about or help with importing products. 18 25 12 m. Participation in generic food and beverage product promotions like Buy BC. n. The provision of technical services such as HACCP (Hazard Analysis Critical Control Points) or ISO. o. Information about government programs, and how to access grants and funds. 33 53 44 42 45 29 56 47 53 The following table shows the percentage of individuals who believed that a realistic membership fee was less than or more than $250. Although respondents from Lower Mainland companies were more likely to indicate that more than $250 was appropriate, this difference is not statistically significant. The previously described results show that company size is more predictive of individuals perceptions of what fee is appropriate than location or industry sector. Realistic Annual Fee Lower Mainland Vancouver Island BC Interior Under $250 58 75 73 Over $250 42 25 27 BC Food and Beverage Processors Survey 17

Appendix A Sample Survey BC Food and Beverage Survey (Revised May 1, 2003) Demographic Information (Complete before the interview, if possible. If not available, obtain the information at the end of the survey.) Sector Revenue Location Number of full-time equivalent employees Good morning/afternoon. May I please speak with (name)? This is (name) from Nova Consulting and Research. I am calling you for the appointment we set up to conduct the survey on behalf of the BC Food and Beverage Processors Steering Committee. I want to ask you about your views on an umbrella organization that could help BC s food and beverage processors meet the competitive challenges that the industry faces and address areas where industry joint action could benefit your firm. My questions should take about 15 minutes. May I proceed? Thank you. SECTION ONE Importance of Issues Technical Note. About one-half of surveys ordered the issues as presented here. In the other half, the order of the issues was 4, 5, 6, 1, 2, and 3. In meetings and forums over the past year, leaders in the food and beverage industry have identified six top issues. I am going to ask you some questions to determine how important these issues are for your company. After that I am going to ask you some questions about food and beverage industry associations. 1. Research and Education (DO NOT READ HEADING) Some food and beverage industry representatives believe that British Columbia s ability to compete in a larger marketplace is hindered by a lack of technical expertise and infrastructure that would help companies to develop innovative new products, processes, and services. On a scale of 1 to 10, where 1 is Not At All Important and 10 is Very Important, how important will the availability of expanded research and education capabilities be for your company in the next three to five years? Not At All Important Very Important Don t Know 1 2 3 4 5 6 7 8 9 10 x 1a. If rating of 7 or higher, ask: Are there any particular activities/functions or topics that are of interest to you? BC Food and Beverage Processors Survey 18

2. Support Infrastructure and Market Information (DO NOT READ HEADING) Some industry representatives believe that the industry would be more effective if information and intelligence regarding new market opportunities, product opportunities, import replacement, and technical developments were more readily available. In your opinion, how important will the availability of enhanced market information be for your company in the next three to five years? Not At All Important Very Important Don t Know 1 2 3 4 5 6 7 8 9 10 x 2a. If rating of 7 or higher, ask: Are there any particular activities/functions or topics that are of interest to you? 3. Access to Capital (DO NOT READ HEADING) Some food and beverage industry representatives believe that banks and other financial institutions are reluctant to lend money to food and beverage processors because they perceive the industry to be too risky. Industry representatives believe that limited access to capital is a significant obstacle to the industry s growth and development. In your opinion, how important will expanded access to capital be for your company in the next three to five years? Not At All Important Very Important Don t Know 1 2 3 4 5 6 7 8 9 10 x 3a. If rating of 7 or higher, ask: Are there any particular activities/functions or topics that are of interest to you? 4. Responsive and Equal Regulations (DO NOT READ HEADING) Some industry representatives experience frustration because they have to abide by different regulations in different markets. For example, export market factors like customs clearance and product labeling affect how easily products can be sold. Some industry representatives have called for harmonized regulations or the establishment of a common source of information that would help companies address regulatory barriers. In your opinion, how important will harmonized regulations or a common source of information be for your company in the next three to five years? Not At All Important Very Important Don t Know 1 2 3 4 5 6 7 8 9 10 x 4a. If rating of 7 or higher, ask: Are there any particular activities/functions or topics that are of interest to you? BC Food and Beverage Processors Survey 19

5. Coordination and Strategic Focus (DO NOT READ HEADING) Some industry representatives believe that BC s food and beverage processors need to find a common ground in order to effectively address industry challenges and issues. They think there is a need to coordinate the diverse interests of industry sub-sectors so that the industry as a whole can take a strategic approach to competitiveness and growth. How important do you think it will be for the industry to have a coordinated, industry-wide strategy in the next three to five years? Not At All Important Very Important Don t Know 1 2 3 4 5 6 7 8 9 10 X 5a. If rating of 7 or higher, ask: Are there any particular activities/functions or topics that are of interest to you? 6. Labour Costs (DO NOT READ HEADING) Some industry representatives believe that high labour costs are an obstacle to the overall competitiveness of BC s food and beverage processors. For example, lower labour costs in Alberta and Washington State make those locations more attractive for food and beverage operations. Factors like WCB rates and personal income tax levels raise industry labour costs. In your opinion, how important will labour costs be to your company in the next three to five years? Not At All Important Very Important Don t Know 1 2 3 4 5 6 7 8 9 10 X 6a. If rating of 7 or higher, ask: Are there any particular activities/functions or topics that are of interest to you? 7. Are there any issues, other than the ones we have just talked about, that you think should be priorities for the food and beverage industry over the next three to five years? (DO NOT READ, CIRCLE ALL THAT APPLY, PROBE) 1. Market access 2. Advocacy 3. Networking 4. Affinity/Discount Programs 5. Other (Specify) 6. Don t Know BC Food and Beverage Processors Survey 20

8. What issues do you think will have the greatest impact on your business during the next three to five years? (DO NOT READ, CIRCLE ALL THAT APPLY, PROBE) 1. Competitive cost structure/level playing field with other jurisdictions. 2. Trade rules (information on/application of). 3. Environmental concerns. 4. Health and safety. 5. Supply of raw materials. 6. Supply chain consolidation/trade relations. 7. Genetically modified foods. 8. Labeling (including foreign labeling requirements). 9. Shifts in consumer demand. 10. Food safety. 11. Transportation/distribution. 12. Competition (new competitors/global competitors). 13. New technology. 14. Industry diversification. 15. Other (specify). 16. Don t Know SECTION TWO Industry Associations 1. I have a few questions about food and beverage industry associations and groups. Are you currently a member of any food and beverage associations or sector processing groups like the BC Dairy Council, BC Small Scale Processors Association, Food Processors of Canada (FPCMP), or the Alberta Food Processors Association (AFPA)? 1. Yes (specify): GO TO Q2 2. No GO TO SECTION THREE 3. Refused GO TO SECTION THREE 2. If one group in Q1: Can you tell me why you belong to this group? If more than one group in Q1: Can you tell me why you belong to these groups? 3. Are there any services that the groups you belong to do not provide that a BC food and beverage association could provide? (DO NOT READ, CIRCLE ALL THAT APPLY) 1. Lobbying the Provincial Government 2. Networking 3. Affinity/Discount Programs 4. Market Access 5. Other (specify) 6. Don t Know BC Food and Beverage Processors Survey 21

4. Thinking about the association(s) you belong to, how would you rate the value of your membership considering what you pay? Please rate this on a scale ranging from 1 to 10, where 1 means you are receiving poor value for what you are paying and 10 means you are receiving excellent value for what you are paying. Poor Value Excellent Value Don t Know 1 2 3 4 5 6 7 8 9 10 x 4a. If rating of less than 6, ask: Can you tell my why you say that? (DO NOT READ) 1. Too expensive 2. Too few benefits 3. Other (specify) 4. Don t Know SECTION THREE Specific Services 1. A few minutes ago I asked you to rate the importance of six general issues that food and beverage industry representatives have identified over the past year. Now I am going to read you a list of some very specific services that a BC food and beverage industry association might provide if there were sufficient interest. For each one please tell me how interested you would be in the service. Would you be Very Interested, Somewhat Interested, or Not At All Interested? Please let me know if you already receive the service from another group or association. Service a. Meetings and forums with food and beverage organizations that would provide you with networking opportunities with the trade. b. Meetings and forums with other individuals working in the food and beverage industry that would provide you with networking opportunities. c. Lobbying the federal government about issues that are important to the food and beverage industry. d. Lobbying the provincial government about issues that are important to the food and beverage industry. e. Lobbying local governments about issues that are important to the food and beverage industry. f. Affinity programs that provide discounts for such things as VISA, telephone long distance service, or business insurance. g. Education seminars on topics such as changes in legislation or industry regulations, workplace health and safety, labeling, shipping to the US. h. A website that provides information about issues relevant to the food and beverage industry. i. Help with staff recruitment, development, or training. Not At All Interested Somewhat Interested Very Interested Already have this service Don t Know BC Food and Beverage Processors Survey 22

Service j. Information about or help with product marketing, including shipping to and from areas in Canada outside of BC. k. Information about or help with product marketing and exporting, including joint venture exporting opportunities. l. Information about or help with importing products. m. Participation in generic food and beverage product promotions like Buy BC. n. The provision of technical services such as HACCP (Hazard Analysis Critical Control Points) or ISO. o. Information about government programs, and how to access grants and funds. p. Is there anything else a BC food and beverage industry association might provide? Not At All Interested Somewhat Interested Very Interested Already have this service Don t Know INTERVIEWER: If there are any comments for a. to o., please place them here. 2. We have conducted extensive research on different food and beverage organizations in Canada, the US, and Europe. We have found several successful models. Please indicate which of the following two models you think would best meet your company s needs. 1. The first is a confederation of existing sector organizations that would jointly fund an umbrella association that would address common issues. 2. The second is an organization consisting of individual food and beverage processors who would pay a membership fee and fees for additional services. DO NOT READ 3. I would you prefer a combination of these two models. 4. Don t Know 5. Other (specify): BC Food and Beverage Processors Survey 23

3. If an umbrella organization were formed, what specific role should it play and what services would you want it to offer? (DO NOT READ, CIRCLE ALL THAT APPLY, PROBE) 1. Advocacy/Lobbying 2. Technical Services/Technical Support 3. Education 4. Networking 5. Coordination of Food and Beverage Sector Interests 6. Media Relations 7. Education (Seminars, training, certification, etc.) 8. Access to Industry Programs and Funding 9. Affinity Programs 10. Other (specify) 11. Don t Know 4. On a scale of 1 to 10, where 1 is Not At All Interested and 10 is Very Interested, how interested would you be in joining a BC-based food and beverage industry association that would provide the services and address the issues we have discussed? Not At All Interested Very Interested Don t Know 1 2 3 4 5 6 7 8 9 10 x 5. Whether or not you are interested in becoming a member, what do you think would be a realistic annual membership fee for a company like yours? Would it be 1. Under $100 2. $100 to $250 3. $250 to $500 4. $500 to $1000 5. $1000 to $5000 6. Over $5000 DO NOT READ 7. Don t Know 6. Finally, would you be interested in being involved in an industry association, for example, as a board member or committee member? 1. Yes 2. No 3. Don t Know/Refused Thank you for taking the time to talk to me today. BC Food and Beverage Processors Survey 24